Pre-opening Comments for Friday April 26th
U.S. equity index futures were higher this morning. S&P 500 futures were up 46 points at 8:35 AM EDT.
S&P 500 futures added 11 points following release of the March PCE Price Index at 8:30 AM EDT. Consensus was an increase of 0.2% versus a gain of 0.3% in February. Actual was a 0.2% increase. On a year-over-year basis, consensus for the March Index was a gain of 2.6% versus a gain of 2.5% in February. Actual was a 2.7% increase. Excluding food and energy, Consensus for the March PCE Price Index was an increase of 0.3% versus a gain of 0.3% in February. Actual was a 0.3% increase. On a year-over-year basis, consensus was an increase of 2.6% versus a gain of 2.8% in February. Actual was a 2.8% increase.
Microsoft gained $17.42 to $416.46 after reporting higher than consensus third quarter earnings.
![clip_image001[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2024/04/clip_image0011-11.png "clip_image001[1]")
Alphabet added $18.30 to $174.30 after reporting higher than consensus first quarter earnings.
![clip_image002[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2024/04/clip_image0021-12.png "clip_image002[1]")
Intel dropped $3.11 to 32.00 after reporting less than consensus fiscal second quarter revenues.
![clip_image003[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2024/04/clip_image0031-10.png "clip_image003[1]")
Gilead gained $1.73 to $67.00 after reporting higher than consensus first quarter earnings.
![clip_image004[1]](https://timingthemarket.ca/techtalk/wp-content/uploads/2024/04/clip_image0041-5.png "clip_image004[1]")
Technical Notes
Chinese equities and related ETFs added to gains. JD.com a NASDAQ 100 stock moved above $27.68 completing a reverse head & shoulders pattern
United Kingdom iShares $EWU moved above $34.53 to an all-time high extending an intermediate uptrend.
Communication Services SPDRs $XLC moved below $77.86 and $77.71 setting an intermediate downtrend. Largest individual holding with a 23.22% weight is META. Alphabet (GOOG and GOOGL) have a combined 24.59% weight.
S&P 100 and NASDAQ 100 stocks moving below intermediate support following META’s news after the close on Wednesday included Meta, Comcast, O’Reilly Automotive, Bristol Myers, IBM and Dow Holdings
Philip Morris $PM an S&P 100 stock moved above $99.67 to an all-time high extending an intermediate uptrend.
AstraZeneca $AZN a NASDAQ 100 stock moved above $74.91 to an all-time high extending an intermediate uptrend.
HudBay Minerals $HBM.TO a base metals producer moved above $11.10 to a three year high. Responding to takeover activity in the base metals sector as well as higher base metal prices.
BHP and Anglo American, two major base metals producers are in talks either for a takeover by BHP or for a merger.
Waste Connection $WCN.TO a TSX 60 stock moved below $225.90 and $222.68 completing a Head & Shoulders pattern.
Wolf on Bay Street
Don Vialoux is a guest on the radio show this week. Discussion starts with “Sell in May and go away”? The show is available at 7:00 PM EDT on Saturday on Corus Radio (Radio 640).
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for April 25th 2024
Green: Increase from previous day
Red: Decrease from previous day
Source for all positive seasonality ratings: www.EquityClock.com
Commodities
Daily Seasonal/Technical Commodities Trends for April 25th 2024
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for April 25th 2024
Green: Increase from previous day
Red: Decrease from previous day
Links offered by valued providers
MoneyTalk – How the new capital gains rules could impact you
MoneyTalk – How the new capital gains rules could impact you – YouTube
Meta Plunge Spooks Wall Street: Guy Adami and Liz Young
Meta Plunge Spooks Wall Street – YouTube
S&P 500 Momentum Barometers
The intermediate term Barometer dropped 2.40 to 42.80. It remains Neutral.
The long term Barometer slipped 0.80 to 75.20. It remains Overbought.
TSX Momentum Barometers
The intermediate term Barometer dropped 4.02 to 53.57. It remains Neutral.
The long term Barometer dropped 1.34 to 66.52. It remains Overbought.
Disclaimer: Seasonality ratings and technical ratings offered in this report and at
www.equityclock.com are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed
|
|
April 26th, 2024 at 12:15 pm
Paula
Here is the XIU.to chart shown with Elder bars. My concern with Elder’s work is note the 25 line and 20 line in blue. The major trendline has been below 25 and even 20 off and on for some time now. According to his theory being below these two lines means the trend is down and bearish. But price has often risen for some time even with this trend line being below 25 or 20. That is what always concerned me with the timeliness of his work. Perhaps Elder bars are better used with Weekly charts. What do you conclude with this??
https://stockcharts.com/h-sc/ui?s=XIU.TO&p=D&yr=1&mn=0&dy=0&id=p59496428404&a=1047728980
April 26th, 2024 at 1:20 pm
Paula
Here is a 6 month chart that shows the trendline better and while below 25 price did rise a lot.
https://stockcharts.com/h-sc/ui?s=XIU.TO&p=D&yr=0&mn=6&dy=0&id=p84060551851&a=945421647
April 26th, 2024 at 3:47 pm
Ron/BC,
I wrote a long response but am getting an error message when I try to post.
Will try again later.
April 27th, 2024 at 8:48 am
Ron/BC,
I am trying to understand your question. I think you are asking about whether the price can still be in an uptrend with the ADX below 20-25?
I will try to break it down, according to what I see on the 6-month chart:
April 27th, 2024 at 8:51 am
I tried sending my whole response in one post and that did not work. Just sending post #4 worked so I will send it piece meal. I sent an email to the webmaster and it came back to me.
April 27th, 2024 at 8:53 am
https://schrts.co/yapYswTW
1. The change in trend on the ADX does not correspond exactly with the change in trend on the price.
April 27th, 2024 at 8:54 am
2. The +DI will cross above the ADX and/or the -DI before the ADX moves up. This is similar to any short-term moving average crossing above the longer-term moving average before the longer-term average starts to move up.
April 27th, 2024 at 8:54 am
3. Note the 3 vertical lines I drew on this chart: first the blue in earlyish January about where the ADX starts turning down from above 30. Then the green line at the end of February where the ADX starts turning up from below 15. Then the blue line at the start of April when the ADX starts turning down from above 30. This is how I like to draw the lines to indicate a change in trend. Of course, the price can fluctuate but note that from the first blue line to the green line, a trading range can be drawn where there was not a defined trend. Then from the green line to the second blue line there was a defined trend. From the second blue line until now, there is what looks like another trading range. When there is a trading range, the price fluctuates between the top and bottom of the range and depending on the up or down, sometimes the green (+DI) is above the ADX and/or the (-DI) or the other way around. So, depending on the time frame you are trading you can take trade short term fluctuation using these cross-overs but be aware that there is not a longer-term trend. On this chart, except for very short term, there is not a defined down trend. The other evidence for this is the relatively few number of red Elder bars. Notice that during the uptrend, there were none.
April 27th, 2024 at 8:55 am
4. Whether the ADX is above or below 20-25 is more like asking if it is overbought or oversold. The ADX does tend to mean revert and you never know from how high or how low but see the pattern on this on this chart: it seems to top out around 35 and bottom around 14 – these are not absolute numbers. I didn’t want to draw more lines since that would be more confusing.
April 27th, 2024 at 8:57 am
5. The main thing to be aware of is that when the ADX is declining, it is a trading range market. When the ADX is rising it is a trending market. Whether it is bullish or bearish depends on whether the green line is above the red line for a bullish market or if the red line is above the green line for a bearish market. On this chart, it has either been bullish or neutral (trading range).
April 27th, 2024 at 9:00 am
I hope this makes sense. I appreciate you asking about the ADX, since it gives me the opportunity to explain it. If I can explain it successfully then it means that I really understand it. I realize that it is not for everyone. Since my post didn’t work yesterday, I had time to look up what Elder says in his book: “The New Trading for a Living”. I think I have explained it but if you want me to write out his rules for ADX, let me know.
April 27th, 2024 at 9:04 am
I’m really glad I wrote all this out in Word and saved it. If I had just done it in the reply box, it would have been lost.
April 27th, 2024 at 12:44 pm
Paula
Thanks for taking the time. I guess one should get rid of whatever isn’t relative to Elder on a chart to keep it simple and clear. EX: moving averages or anything else overlaid the price chart. Re:#8 post. You didn’t post a chart showing the vertical blue lines you spoke of. Here is a 6 month chart with non elder info removed. When you say ADX are referring to the black line? I guess one could just use the black line to see the “trend” rising or falling. And if rising wait for the green thin line to cross back above the thin red line,correct??
https://stockcharts.com/h-sc/ui?s=XIU.TO&p=D&yr=0&mn=6&dy=0&id=p21223386819&a=945421647
April 27th, 2024 at 1:21 pm
Ron/BC
I’m glad you got these posts. The chart I spoke of is in #6.
Yes, the ADX is the black line. Usually, the green line will rise above the red line and then above the ADX/black line before the latter actually starts to turn up. This is what I was referring to in post #7 (my point #2) above. Of course, you can jump the gun and have a short-term trade even if the ADX has not turned up yet but there is more likelihood of a longer trade when the ADX has actually turned up. Notice on my chart that the green line crossing above the red line in mid-February before the ADX actually turns up. There was some whipsaw going on during this time, which can happen during a trading range.
I wouldn’t worry about taking off the moving averages but I do look at weekly charts first (another Elder rule) to get a longer perspective.
April 27th, 2024 at 4:38 pm
Paula
The seasonality is bullish for May, June and July.
April 27th, 2024 at 7:26 pm
Paula
Here is a Weekly chart of XIU.to. XIU.TO is a tradable symbol with smaller dollar amounts changes even on larger moves so not that threatening to the account. One can trade more often with greater confidence. Note the RSI 8 tops signal a price high and a selloff for a few days after. The more indicators that suggest price direction and timeliness the better for me. The thin lines of the Elder bars don’t show the red and green well on my charts and I can’t seem to improve the colors so is hard to see them clearly. Always nice to see clear colored cross overs.
https://stockcharts.com/h-sc/ui?s=XIU.TO&p=W&yr=2&mn=0&dy=0&id=p85939998417&listNum=1&a=1664649722
April 28th, 2024 at 11:43 am
Ron/BC
If are going to hold XIU for May, June, July, consider XEI instead. They are almost the same except that XEI contains all dividend paying stocks, so it has an annual dividend yield of 5.3%, paid monthly. XIU has an annual dividend yield of 3.02% paid quarterly. Among its top ten holdings is Shopify, which does not pay a dividend and makes the XIU more volatile. XEI’s management expense ratio (MER) is only .2% vs XIU at .15%, so not that different. Of course, when Shopify is going up, XIU will outperform.
Years ago, I used to trade XIU but I like the monthly income from XEI and don’t trade it.
I don’t know if you ever saw the chart I posted showing the trading ranges vs the uptrend on XIU. Here it is again with a relative chart of XIU: XEI and a relative chart of XIU:ZSP which shows how much SPX has outperformed the TSX over the last 6 month but. But perhaps that is changing…
https://schrts.co/vXUzDstF
April 28th, 2024 at 11:56 am
Ron/BC,
Maybe you are better off ignoring the ADX. I don’t think it suits your style of trading. Your RSI(8) seems to work well as and your breakout levels.
I am surprised that you want more indicators. I thought you liked less cluttered charts.
On your weekly chart, I changed the colours of your moving averages and lengthened the timeframe to 3 years. The other colours seem brighter to me. Maybe it is just my imagination.
https://schrts.co/KcMiVrYG
April 28th, 2024 at 12:34 pm
Paula
I don’t hold any stock for months as I tend to just buy on a buy signal short term and get out when it looks done short term. I just noted that the seasonal bias is bullish for May,June and July. It just helps with the odds overall. I’ve never spent time on the fine details of dividends and other fees etc. I’m either in a trade or in cash. I’d prefer to buy a GIC inside a TFSA for one year for income. And yes I think the ADX is not that suited for my style of trading but do like to find indicators that signal a good trade. I do like the colors on the price bars though. My concern with XEI.to is there is no volume to speak of unlike XIU.to. And it doesn’t outperform that much overall. I guess I’m used to preferring high volume short term trades. Thanks for your posts on Elder bars.
https://stockcharts.com/h-sc/ui?s=XIU.TO&p=D&yr=0&mn=6&dy=0&id=p57757401920&a=1044549872
April 28th, 2024 at 1:56 pm
Paula
The XEI.to does have some nice bounce backs for sure. Here is a two year chart of the XIU.to with the XEI.to and XSP.to overlaid. The high volume on the XIU.to would make trading easier to get in and out.
https://stockcharts.com/h-sc/ui?s=XIU.TO&p=D&yr=2&mn=0&dy=0&id=p23213774474&a=1044549872
April 28th, 2024 at 5:32 pm
Paula
Here is a chart of XIU.TO–XEI.TO that shows the relative performance of them. You likely know this but thought I’d post it as a picture is worth a thousand words they say. The previous chart in #20 shows that on a short term buy signal buying the XEI.to for a quick trade would seem to be a good bet.
https://stockcharts.com/h-sc/ui?s=XIU.TO%3AXEI.TO&p=D&yr=2&mn=0&dy=0&id=p88012529987&a=1665605223
April 28th, 2024 at 6:39 pm
One more relative chart of XIU.TO/XEI.TO/XSP.TO
April 28th, 2024 at 6:39 pm
https://stockcharts.com/h-sc/ui?s=XIU.TO&p=W&yr=5&mn=0&dy=0&id=p66221164951&a=1665434152